Over the past few years, behavioral retargeting companies have turned to performance networks as an obvious place to gain immediate access to hundreds of brands and to generate new revenue streams. It’s clear that behavioral retargeting is appealing to advertisers and is gaining an increasing amount of publicity.
So what do advertisers need to consider if they’re interested in taking the plunge into this growing sector?
The headline sales figures through re-targeting campaigns are impressive. At Affiliate Window, retargeting companies have achieved considerable sales on several programs. But we’re reaching a stage of maturity in the marketplace where sales volume is no longer the only consideration. The value of these sales clearly needs to be evaluated to provide a greater understanding of the worth of traffic through re-targeting companies.
In essence, re-targeting companies display banners to consumers who have already visited an advertiser’s site. These consumers may have the tendency to purchase and may return to the site without the aid of retargeted creative. However, re-targeters are able to provide branding across display networks as well as offering the potential to convert customers who have left a site who may not have returned.
In most instances, these companies will require a Post Impression (PI) cookie in place on a campaign. Typically through performance networks (although not a general online standard) is to use a 48 hour PI window where if a banner is viewed and is not overwritten by a click cookie, the re-targeting publisher will be rewarded the sale. One of the key considerations in ascertaining the value of the transaction is how much the viewing of a banner impacted upon the sale where no click has taken place.
Closely monitoring the performance of re-targeting campaigns is essential to its success. One of the key performance indicators could be the separation of sales coming through PI cookies in comparison to click cookies.
In the first month of a re-targeting campaign the percentage of sales that come through PI cookies is likely to be high as the companies develop the profiles of their customer base. As such, the first month of figures could be removed from the stats so that these figures are not skewed.
If a click has occurred, it can be assumed that the user intended to interact with the banner and can therefore be easily be argued that the banner has been influential in the purchasing decision. Where there is not a click present, the question of influence comes into play; how much has a re-targeting banner(s) influenced a consumer? Clearly it can be argued that the consumer may not have paid any attention to the banner, and could have returned to the advertiser site anyway. In this scenario is there any reason why a re-targeting company should be rewarded the sale?
This is a gray area and one that needs to be better understood. An alternative payment model for re-targeting publishers would be rewarding on a CPC basis. Where a click is present, the user has shown the intent by clicking on the banner which has added value to the purchasing cycle. Re-targeted adverts should be highly relevant to the individual, so it’s arguable that without user engagement, the adverts have had little influence over the sale. This does however move these companies away from the performance channel.
Another consideration is the frequency that customers are retargeted to. There is a fine line between re-engaging with potential customers and spamming them. Again it is questionable how engaged a consumer is with a re-targeted advert days or weeks after initially visiting the site. Guidelines should be set for how long the customer will be retargeted for and the length of time the re-targeting advert can still legitimately be attributed the sale.
Arguably the most important consideration when running a re-targeting campaign through the performance channel is knowing how sales are being de-duplicated. While any sales through the channel will automatically be de-duped by the network, there should be a robust de-duplication process in place across other online channels including against post impression cookies.
Re-targeting can be a valuable tool for advertisers but it is extremely important to determine the value they bring. By truly understanding this, effective commission rates can be set to reflect how incremental the sale is that is delivered and that’s ultimately what it’s all about; intelligent commission setting that rewards the value.